Friday, November 09, 2007

WASHINGTON - Secretary of State Colin Powell okayed the arms deal with a tap of a finger, unveiling the State Department's new D-Trade, a fast, paperless process for granting licenses to US military contractors for arms sales. After joking that State had only recently junked its last vintage Wang computer, Powell pushed one button to approve the sale of a pair of night-vision goggles to the United Kingdom. US government oversight of the arms trade had officially entered the virtual age.

The electronic licensing of D-Trade is only one of a range of pending reforms that would substantially recast and expedite the way the US government handles arms exports, from lowly and innocuous spare parts to the latest unmanned aerial vehicles. The implications for Asia are significant. The United States hopes to facilitate arms sales to such allies as Australia and South Korea, but also to expand new relationships with Pakistan and Indonesia. Taiwan was the world's largest arms importer in the late 1990s, and the US wants a bigger piece of this market. The Europeans, contemplating a lifting of the arms embargo against China, are eyeing an equally lucrative market.

The global arms market is fiercely competitive, and sellers are always looking for an edge. Although the US is the world's largest arms exporter, controlling nearly half of the international market of about US$30 billion a year, both the government and industry have been pushing for the better part of a decade to increase this market share. One way of boosting exports is to make it easier for sellers to get licenses. Every year, the US government processes more than 50,000 export licenses for military goods. Defense contractors frequently complain about bureaucratic delays, which they argue make the US less competitive against other high-ranking exporters such as Russia and France.

But what looks like a delay to one person is a justifiable concern about national security or proliferation to another. In streamlining the process of exporting arms and equipment, skeptics question whether the administration of President George W Bush is seizing market share at the expense of national security.

"Since the late 1990s, industry has been pushing the State Department to remove what they perceive are barriers to defense trade cooperation and US competitiveness in the international arms market," says Matt Schroeder, an arms-trade specialist with the Federation of American Scientists (FAS). "The problem is that many of these barriers help to prevent military technologies from ending up in the wrong hands."

Cutting red tape on innocuous itemsJoel Johnson of the Aerospace Industries Association disagrees. He lists various components - steering wheels, air conditioners, hydraulic hoses - that have been only very slightly modified from their commercial versions to serve military functions and yet require separate licenses. "There's still an awful lot in the system that shouldn't be there," he says. "Just give me an 'officer of common sense' - I'd hold [these components] up to him and he'd said, 'Nah, we're not interested in that, that's not what we have in mind.'"

The push for arms-export reform originated in the administration of former president Bill Clinton. As part of its geo-economic philosophy, his administration urged the defense industry to become more competitive, enter new markets such as Eastern Europe and Latin America, and ink global co-production agreements for the latest high-tech bomber, the Joint Strike Fighter. The Bush administration enthusiastically embraced this policy. After September 11, 2001, the administration used the "war on terrorism" to boost military aid to countries such as the Philippines and India and to provide anti-terrorism funding for the first time to such countries as Tajikistan and Indonesia.

Last month, the administration designated Pakistan a "major non-NATO ally". Once a pariah state because of its nuclear program with potential military uses, Pakistan now has access to a wide range of US military goods, even though it remains under a cloud for selling advanced military technology to such countries as North Korea and Libya.

The Bush administration also wants systemic change in the arms export system. For instance, the administration hopes to expedite sales to the UK and Australia by granting them exemptions from the International Traffic in Arms Regulations (ITAR). The US provided an ITAR exemption to Canada but narrowed it in 1999 after the discovery of several cases of unauthorized re-export of US military goods.

The arms-control community is concerned that something similar will happen with the UK and Australia. Rachel Stohl of the Center for Defense Information cites a high-profile cases of arms-trade violations in the UK, including the 1998 Sandline scandal in which the British government broke a United Nations arms embargo by supplying weapons to Sierra Leone. She also worries that US weapons, such as small arms bound for Australia, will end up in places such as Indonesia and the Philippines, which are fighting insurgencies and separatist movements that some label as terrorist. "I lose more sleep over the United Kingdom than Australia," Stohl says, "but because of the geographic position of Australia, we have to be concerned there as well."

Export of C-130 transports might be expeditedAlso up for its rolling quadrennial review is the US Munitions List (USML). One possible item to be removed, according to a source in the arms-control community, is the C-130 transport plane, which Pakistan has been offered through a foreign military financing grant and which China also would like to acquire. The China military market, which the United States has not supplied since the 1980s, is particularly controversial.

"Changes to the Munitions List thus far have been modest and demonstrate an acute awareness of the security threats posed by decontrol of US defense articles," says Schroeder, the FAS arms-trade specialist. "We hope that changes to the remaining USML categories will reflect similar thinking and priorities."

The European Union, meanwhile, is debating lifting the arms embargo on China imposed after the 1989 Tiananmen Square massacre. According to Ian Anthony, a researcher at the Stockholm International Peace Research Institute, "The embargo was never intended to be a permanent policy, and there does not seem to be a large volume of trade with China in those items of defense equipment that are not subject to the current embargo. The statements from the European and Chinese sides are that they do not anticipate any sudden increase in arms sales - rather the removal of a political impediment to improved EU-China relations." A 1998 code of conduct restricts EU arms sales to China that could be used for waging war or suppressing internal dissent.

The US sees this policy debate very differently. A State Department official confirmed that lifting the EU ban "cannot help but have a very negative impact" on winning congressional approval for facilitating arms trade with allies such as the UK, "even if the European Union views this only as a symbolic step".

The Bush administration has further assailed the EU on this issue by pointing to continued Chinese violations of human rights. Rachel Stohl of the Center for Defense Information says the human-rights argument is a red herring. "We can't underestimate the power of competition behind these [US arms export] reforms," she points out. "Markets are very tight. The United States wants to make sure it has access to these new markets."

All-or-nothing controls make poor policyJoel Johnson of the Aerospace Industries Association proposes a compromise on exports to China. "All-or-nothing controls are probably poor policy," he says. "We should be sitting down with our European brethren to talk about the high-end things we don't want exported to China."

The Bush administration was expected to push arms-trade reforms through more than a year ago. But a string of more critical events - September 11, the war in Afghanistan, and the invasion of Iraq - have delayed the unveiling of plans to overhaul defense-trade relations with allies. According to one State Department official, "We're hoping to have it rolled out soon. It has not yet gone to the president."

The delays involve not only war but politics. The administration "might have gotten tripped up on its own rhetoric of 'you're either with us or against us'," says William Hartung, arms-trade expert and author of the recent book How Much Are You Making on the War, Daddy? Isolationists within the Republican Party are not happy with the idea of facilitating arms transfers to allies that may not always support US policy. As Hartung summarizes this argument, "If you can't trust them, it doesn't make sense to sell them everything on an open basis."

Although D-Trade is now up and running, the other elements of the reforms may wait until after the US elections in November. The State Department is optimistic. But Hartung predicts that if the Bush administration were smart, "it would wait until after the elections - to avoid being accused of loosening restrictions on the merchants of death". Joel Johnson also expects further delays. "We'll have to wait until after the elections. Congress will be sidetracked, the executive branch will be sidetracked. In the next administration, whether Bush or [Democratic presidential contender John] Kerry, lots of people will change and you'll have another shot at finding someone who thinks export controls need to be changed."

John Feffer (www.johnfeffer.com) is the author, most recently, of North Korea, South Korea: US Policy at a Time of Crisis.